(Ann Arbor, MI) — Consumer sentiment snapped a four-month decline in late May as tariff fears eased. The University of Michigan’s final reading for the month edged up a point from early May. The survey noted an improvement in expected business conditions following a temporary pause on some tariffs on Chinese imports. The survey’s chief economist said consumers see the outlook for the economy as no worse than last month, but overall, they remain quite worried about the future.
Year-ahead inflation expectations were little changed at 6.6%, inching up from 6.5% last month. This is the smallest increase since the election and marks the end of a four-month streak of extremely large jumps in short-run expectations. Notably, long-run inflation expectations fell back from 4.4% in April to 4.2% in May. This is the first decline seen since December 2024 and ends an unprecedented four-month sequence of increases.
